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Report Finds Decentralization a Major Challenge for Myanmar’s Ongoing Reforms

Yangon, September 9, 2013 — On September 4, The Asia Foundation and the Centre for Economic and Social Development of the Myanmar Development Resource Institute released a new study “State and Region Governments in Myanmar” that analyzes the state and region governments created under the 2008 Constitution and their relationship with broader governance, peace and decentralization processes. A democratic transition has gained significant momentum in the country since the 2010 elections, and concepts of good governance and decentralization have figured prominently in President U Thein Sein’s reform agenda. The government’s decentralization initiatives have been carried out by the President Office Ministries who are working closely with the state and region governments to implement the Framework for Economic and Social Reform at the subnational level. The focus on subnational governance has been bolstered by recent developments, including the promulgation of the 2013 Region or State Hluttaw Law on August 6 and the President’s speech on August 9, in which he called for more authority to be decentralized to the region and state governments.

While these new subnational governments have started to open up more political space and illustrate the government’s commitment to a people-centered development approach, they face significant limitations. While the emergence of elected representative bodies at this level is a major reform, these regional parliaments, or hluttaws, face major capacity constraints. Additionally, the executive at the state and region level is still dominated by a top-down appointment process, and ministers have not achieved sufficient authority over the administrative apparatus, limiting the effectiveness of the new governments. State and region budgets are as yet small, and prepared in a way that preserves central influence. Overall, the actual reach of administrative responsibilities and confusion over executive structures, the small size and central oversight of the budget, and the lack of capacity and human resources, all mean that Myanmar is far from achieving its goals of decentralization.

There are many areas of promise and potential in the subnational reforms. It is still early in the decentralization process, and the emergence of new local political and institutional space is already increasing the awareness and interest of diverse groups in further decentralization. This interest is not limited to ethnic minority or regional parties, but is shared by local branches of national parties and local officials themselves. Increasingly, civil society organizations and the local media already openly discuss subnational governance issues. Given that, there is increasing consensus among the central government and the parliament, state/region governments, political parties, and civil society that further decentralization reforms to states and regions are needed.

The report suggests reforms to align the new political structures with administrative and fiscal arrangements, broaden the scope of decentralization to more significant areas, and link it with wider democratization, peace and public administration reform processes. More specifically, the report suggests the following reform priorities:

Rationalize state and region government administration and human resources;

Develop a transparent and rules-based intergovernmental fiscal system and resource sharing mechanisms;

Strengthen the capacity of state/region government.

The Myanmar Development Resource Institute’s Centre for Economic and Social Development (MDRI-CESD) is a think tank dedicated to the economic and social transformation of Myanmar and undertakes participatory policy research studies related to economic reform, poverty reduction and good governance in Myanmar and regularly publishes policy briefs and research papers.

The report is supported by a Program Partnership Agreement from the UK Department for International Development.Â To learn more, read the executive summary and full report.